Shots were fired into a Leura business in the early hours of Thursday morning and a man remains in police custody.
Blue Mountains Police were patrolling Leura about 1.40am on Thursday morning when they were told shots had been fired into a shop.
A short time later, a 34-year-old man was arrested near the scene, and a loaded handgun was found nearby.
The shop was closed and there was no one inside the business at the time and there have been no reports of injury.
Police came across a station wagon – believed to have been used by the man – in the carpark of a hotel on the Great Western Highway. During a search of the vehicle police found a rifle and ammunition.
The man remains in custody at Katoomba Police Station and inquiries are continuing.
Police are urging anyone with information in relation to this incident to call Crime Stoppers on 1800 333 000 or use the Crime Stoppers online reporting page: https://nsw.crimestoppers.com.au.